Month: April 2016

Many of my clients who own residential rental property manage the properties themselves rather than using a property-management company. Most of the time things are fine. If the renter has a problem, like a broken furnace, the renter calls the owner, and the problem gets fixed. But sometimes owner-renter relations sour. Consequently, I tell my clients, “hope for the best, but plan for the worst.” There is no better way for an owner of residential rental property to follow this advice than by having a written rental agreement and knowing and following the Utah Fit Premises Act (the Act). Every attorney who practices landlord-tenant law should be familiar with the Act. This article provides a review of the main provisions of the Act and practical suggestions on how to advise clients. There are provisions in the Act regarding possession of a residential rental property and also crime victim’s rights that this article does not cover.

The Act codifies duties of owners and renters to maintain residential rental units in a habitable condition and provides specific remedies to renters for violations of the Act by property owners. Utah Code Ann. §§ 57-22-1 to -7 (West, Westlaw through 2015 First Spec. Sess.); Carlie v. Morgan, 922 P.2d 1, 6 (Utah 1996). The Act applies to all owners, lessors, sublessors, and renters of residential rental property, regardless of whether there is a written rental agreement. Utah Code Ann. § 57-22-2. The Act calls residential rental property a “residential rental unit” and defines it as the “renter’s principal place of residence and includes the appurtenances, grounds, and facilities held out for the use of the residential renter generally, and any other area or facility provided to the renter in the rental agreement.” Id. § 57-22-2(4). The Act does not apply to “facilities contained in a boarding or rooming house or similar facility, mobile home lot, or recreational property rented on an occasional basis.” Id.

Generally, the Act requires the owner of a residential rental unit to “maintain that unit in a condition fit for human habitation and in accordance with local ordinances and the rules of the board of health having jurisdiction.” Id. § 57-22-3(1). At a minimum, a residential unit must have “electrical systems, heating, plumbing, and hot and cold water.” Id. However, the Act does not impose any duties on an owner regarding the “breakage, malfunctions, or other conditions which do not materially affect the physical health or safety of the ordinary renter.” Id. § 57-22-3(3) (emphasis added).

The Act also imposes duties on the renter. In general, a renter must “cooperate in maintaining his [or her] residential rental unit in accordance with the [Act].” Id. § 57-22-3(2). But owners and renters can reallocate any duties identified in the Act in a signed written agreement. Id. § 57-22-3(4). This, of course, should take the form of a written rental agreement (sometimes called a lease). Anybody renting property without a written rental agreement is asking for trouble.

In this article, I will first identify the duties of an owner of a residential rental unit under the Act. I will then identify a renter’s duties. Finally, I will discuss the remedies the Act provides renters and how an owner should respond to a renter who invokes those remedies.

Owner’s Duties

The Act imposes specific requirements on an owner to maintain a residential rental unit “[t]o protect the physical health and safety of the ordinary renter.” Id. § 57-22-4(1). An owner cannot rent property that is not “safe, sanitary, and fit for human occupancy.” Id. § 57-22-4(1)(a). Thus, an owner must,

(i) maintain common areas of the residential rental unit in a sanitary and safe condition;

(iii) maintain any air conditioning system in an operable condition; and

(iv) maintain other appliances and facilities as specifically contracted in the rental agreement.

Id. § 57-22-4(1)(b)(i)-(iv). If a property consists of more than one residential rental unit, the owner must provide and maintain garbage cans and garbage removal, unless the renter and owner agree otherwise. Id. § 57-22-4(1)(b)(v). Fortunately, as a matter of common sense, most owners comply with these provisions of the Act without knowing it.

The Act also imposes certain duties on an owner before a rental agreement is signed. Specifically, before entering into a rental agreement, the Act requires an owner to do one of three things: (i) “provide the prospective renter a written inventory of the condition of the residential rental unit, excluding ordinary wear and tear”; (ii) “furnish the renter a form to document the condition of the residential rental unit and then allow the resident a reasonable time after the renter’s occupancy of the residential rental unit to complete and return the form”; or (iii) “provide the prospective renter an opportunity to conduct a walkthrough inspection of the residential rental unit.” Id. § 57-22-4(3)(a)-(c). However, an owner’s failure to provide an inventory, a form, or a walkthrough does not excuse a renter from complying with a rental agreement, and it does not “give rise to any cause of action against the owner.” Id. § 57-22-4(5)(a).

Even though in most cases the prospective renter walks through the residential rental unit before renting, an owner should still provide the renter a written inventory or a form for the renter to fill out, or both. That way if a dispute later arises, a renter will have a difficult time successfully claiming something was wrong when the renter moved in. Also, immediately before allowing the renter to move in, an owner should thoroughly photograph the unit.

Sometimes problems arise when an owner enters a residential rental unit to make repairs without giving the renter prior notice. Ideally, the specifics of when an owner can enter a unit and what prior notice should be given should be explicit in the written rental agreement. If it’s not, however, the Act requires an owner to give the renter at least 24 hours’ notice. Id. § 57-22-4(2). Nevertheless, failure to give 24 hours’ notice does not excuse a renter from complying with a rental agreement and does not provide a basis for a cause of action. Id. § 57-22-4(5)(a).

Renter’s Duties

The Act imposes duties on the renters, which are identified in Utah Code Section 57-22-5. These duties are especially important because a renter cannot take advantage of the remedies under the Act unless the renter complies with each of these duties. Id. § 57-22-6(4)(b). The Act first identifies a renter’s affirmative duties as follows: A renter must follow the rules of the local board of health, (i) “which materially affect physical health and safety”; (ii) keep the premises “clean and safe” and not “unreasonably burden any common area”; (iii) dispose of all garbage “in a clean and safe manner”; (iv) “maintain all plumbing fixtures in as sanitary a condition as the fixtures permit”; and (v) “use all electrical, plumbing, sanitary, heating, and other facilities and appliances in a reasonable manner.” Id. § 57-22-5(1)(a)-(e). Further, a renter must use the rental unit “in the manner for which it was designed,” and a renter must have written permission of the owner before increasing “the number of occupants above that specified in the rental agreement.” Id. § 57-22-5(1)(f). Also, a renter must be in compliance with any rental agreement and must be current on the rent. Id. § 57-22-5(1)(g)-(h).

The Act then identifies things a renter cannot do. Specifically, a renter cannot “intentionally or negligently destroy, deface, damage, impair, or remove any part of the residential rental unit or knowingly permit any person to do so.” Id. § 57-22-5(2)(a). A renter also cannot “interfere with the peaceful enjoyment of the residential rental unit of another renter.” Id. § 57-22-5(2)(b). Finally, a renter cannot “unreasonably deny access to, refuse entry to, or withhold consent to enter the residential rental unit to the owner, agent, or manager for the purpose of making repairs to the unit.” Id. § 57-22-5(2)(c).

Renter’s Remedies

The Act provides a renter specific remedies if the residential rental unit has either a deficient condition or a dangerous condition. A “deficient condition” is a condition that “violates a standard of habitability or a requirement of the rental agreement.” Id. § 57-22-6(1)(b)(i). However, the condition is not deficient if it is caused by “the renter, the renter’s family, or the renter’s guest or invitee” and caused by “a use that would violate . . . the rental agreement, or a law applicable to the renter’s use of the residential rental unit.” Id. § 57-22-6(1)(b)(ii). A “dangerous condition” is a condition “that poses a substantial risk of: (i) imminent loss of life; or (ii) significant physical harm.” Id. § 57-22-6(3)(a). The remedies available to a renter under the Act depend on the type of condition, and to use the remedies, a renter must first give proper notice to the owner of the condition. I will first discuss the procedure for providing notice of a deficient condition, and then I will discuss the procedure for notice of a dangerous condition.

If a renter believes his or her residential rental unit has a deficient condition, the renter must give the owner written notice. Id. § 57-22-6(2)(a). The purpose of the written notice is to give the owner a chance to fix the problem before a renter has a right to the remedies in the Act. See id. § 57-22-6. The written notice must contain four things. The first item is a description of each deficient condition. Id. § 57-22-6(2)(b)(i). Though the Act does not explicitly say so, it is reasonable that this description be detailed enough for the owner to be able to identify and fix the condition.

The second required item is a statement that the owner has a corrective period, “stated in terms of the applicable number of days, to correct each deficient condition.” Id. § 57-22-6(2)(b)(ii). The corrective period depends on the deficient condition. If the deficient condition is a violation of the standard of habitability, the corrective period is three calendar days. Id. § 57-22-6(1)(a)(i). If the deficient condition is a violation of the rental agreement, the corrective period is 10 calendar days. Id. § 57-22-6(1)(a)(ii).

The Act’s definition of “standard of habitability” requires an owner to ensure that a residential rental unit meets the requirements of “Subsection 57-22-3(1) or Subsection 57-22-4(1)(a) or (b)(i), (ii), or (iii)” of the Act. Id. § 57-22-6(1)(g). Also as mentioned above, Subsection 57-22-3(1) requires a residential rental unit to be fit for human habitation and to comply with local ordinances and the rules of the local board of health. It also requires that a rental unit have electricity, heating, plumbing, and hot and cold water. Id. § 57-22-3(1). Also mentioned above, Subsections 57-22-4(1)(a) and (b)(i), (ii), and (iii) require that a rental unit be “safe, sanitary, and fit for human occupancy”; have “safe and sanitary” common areas; have functioning electricity, plumbing, heating, and hot and cold water; and have an operable air conditioner (if an air conditioner exists in the unit).

The third item required in a notice of deficient condition is a statement of “the renter remedy that the renter has chosen if the owner does not, within the corrective period, take substantial action toward correcting each deficient condition.” Id. § 57-22-6(2)(b)(iii). A renter has two renter remedies to choose from under the Act: the rent-abatement remedy or the repair-and-deduct remedy. Id. § 57-22-6(1)(e). I will explain each remedy in more detail below.

The fourth and final item required in a notice of a deficient condition is permission for the owner “to enter the residential rental unit to make corrective action.” Id. § 57-22-6(2)(b)(iv). The renter has to serve the notice of deficient condition on the owner either as provided for in the rental agreement or in Utah Code Section 78B-6-805. Id. § 57-22-6(2)(a)(v). Utah Code Section 78B-6-805 identifies the requirements for service of a notice to quit in an unlawful detainer action. (West, Westlaw through 2015 First Spec. Sess.)

When an owner receives a properly served notice of a deficient condition, the owner must either fix the deficient condition or determine whether the residential rental unit is fit for occupancy and, based on that determination, terminate the rental agreement. Id. § 57-22-6(4)(c)(i)(A)-(B). The Act does not define the phrase “fit for occupancy.” See id. §§ 57-22-2, -6. Consequently, it becomes a judgment call by the owner. Certainly, if the unit does not meet the standards of habitability and extensive repairs or renovations are necessary, the unit is probably not fit for occupancy. However, I advise my clients that a determination of fitness for occupancy should not be used as a pretext to terminate a rental agreement with a troublesome or unwanted renter.

If the residential rental unit is not fit for occupancy and the owner decides to terminate the rental agreement instead of fixing the deficient condition, the owner must “notify the renter in writing no later than the end of the [applicable] corrective period.” Id. § 57-22-6(c)(ii)(A)(I). The Act does not say exactly when the rental agreement terminates. Consequently, an owner should identify the date in the notice to the renter. If the owner does not identify the date, one can reasonably conclude that the termination date is the date of the notice. Within 10 calendar days after termination of the rental agreement the owner then must pay the renter “any prepaid rent, prorated . . . to the date the owner terminates the rent agreement” and “any deposit due the renter.” Id. § 57-22-6(4)(c)(ii)(A)(II)(Aa)-(Bb), (4)(c)(ii)(B). Under this procedure, a “renter may not be required to vacate the residential rental unit sooner than 10 calendar days” after the written notice from the owner. Id. § 57-22-6(4)(c)(ii)(C).

Alternatively, if the owner determines the unit is fit for occupancy, the owner must “take substantial action” by the end of the applicable corrective period (either 3 or 10 calendar days) to correct the deficient condition. Id. § 57-22-6(1)(a), (4)(a). The Act does not define “substantial action.” See id. §§ 57-22-2, -6. Thus, I advise my clients to get as much done on the requested repairs as reasonably possible within the applicable corrective period.

If the owner does not take timely and substantial action, the remedy that the renter identified in the notice of deficient condition is triggered. Id. § 57-22-6(4)(a). If the renter chose the rent-abatement remedy, this terminates the rental agreement, and the “rent is abated as of the date of the notice of deficient condition.” Id. § 57-22-6(4)(a)(i)(A)-(B). The owner must “immediately” pay the renter the “entire security deposit that the renter paid under the rental agreement” and “a prorated refund for any prepaid rent, including any rent the renter paid for the period after the date on which the renter gave the owner the notice of deficient condition.” Id. § 57-22-6(4)(a)(i)(C). The renter then must vacate the rental unit “within 10 calendar days after the expiration of the corrective period.” Id. § 57-22-6(4)(a)(i)(D).

If the renter chose the repair-and-deduct remedy, the renter can fix the deficient condition and “deduct from future rent the amount the renter paid to correct the deficient condition, not to exceed an amount equal to two months’ rent.” Id. § 57-22-6(4)(a)(ii)(A)(I)-(II). To take advantage of this remedy, a renter must keep all receipts documenting how much the renter actually paid to fix the deficient condition. Id. § 57-22-6(4)(a)(ii)(B)(I). The renter must also “provide a copy of those receipts to the owner within five calendar days after the beginning of the next rental period.” Id. § 57-22-6(4)(a)(ii)(B)(II).

If a renter believes his or her unit has a dangerous condition, i.e., a substantial risk of imminent loss of life or significant physical harm, “the renter may notify the owner of the dangerous condition by any means that is reasonable under the circumstances.” Id. § 57-22-6(3)(a)-(b). In response, the owner must within 24 hours of receiving notice, begin “remedial action to correct the dangerous condition . . . and . . . diligently pursue remedial action to completion.” Id. § 57-22-6(3)(c)(i)-(ii). However, a notice of a dangerous condition cannot also act as and contain an effective notice of a deficient condition unless the notice is in writing, properly served, and meets the four requirements for a notice of defective condition discussed above. Id. § 57-22-6(3)(d).

Though the Act never explicitly says to, this requirement suggests that if a renter wants to use the rent-abatement or repair-and-deduct remedies when an owner doesn’t repair a dangerous condition, the renter should have first provided notice of a dangerous condition the same way the Act requires a renter to provide notice of a deficient condition. However, the Act never explicitly defines the corrective period for a dangerous condition the way it defines the corrective periods for deficient conditions. See id. § 57-22-6(1)(a). I advise my clients that the corrective period would be the 24 hours an owner has to begin “remedial action to correct the dangerous condition.” See id. § 57-22-6(3)(c)(i). And the remedy trigger would be, instead of failure to take substantial action within 3 or 10 days, failure to begin “remedial action” within 24 hours and failure to “diligently pursue remedial action.” See id. § 57-22-6(3)(c)(i)-(ii).

The logical conclusion of this analysis is that if a renter’s notification of dangerous condition is not in writing, properly served, and in compliance with the other requirements of Subsection 57-22-6(2), the renter is left without a remedy under the Act. However, the renter may still have a remedy for breach of contract under the rental agreement and also remedies under common law. Specifically, a renter can seemingly sue for breach of the implied warranty of habitability. SeeMyrah v. Campbell, 2007 UT App 168, ¶ 21, 163 P.3d 679 (noting the recognition of the common-law implied warranty of habitability). A renter can also claim constructive eviction if an owner doesn’t make necessary repairs. Brugger v. Fonoti, 645 P.2d 647, 648 (Utah 1982). See also Kenyon v. Regan, 826 P.2d 140, 142 (Utah Ct. App. 1992) (noting that constructive eviction occurs when an owner drives a renter out through the owner’s inaction).

Enforcement of Remedies

After the corrective period ends, “a renter may bring an action in district court to enforce the renter remedy that the renter chose in the notice of deficient condition.” Utah Code Ann. § 57-22-6(5)(a). The court must “endorse on the summons that the owner is required to appear and defend the action within three business days.” Id. § 57-22-6(5)(b). If the court decides that “the owner unjustifiably refused to correct a deficient condition or failed to use due diligence to correct a deficient condition,” the renter “is entitled” to the applicable renter remedy, damages, court costs, and a reasonable attorney fee. Id. § 57-22-6(5)(c).

However, Subsection 57-22-6(5)(c) begs the question: Why, when there are specific out-of-court remedies provided, does an owner’s failure to fix a condition entitle a renter to damages, court costs, and an attorney fee? The plain language of the Act suggests that the purpose of the rent-abatement and repair-and-deduct remedies is to avoid court action. Certainly, if an owner blocks a renter from a chosen remedy, the renter should be entitled to judicial relief. But why, if a remedy solves the problem, can a renter get judicial relief?

It is important to note that the Act forecloses any suffering claims by a renter by providing that “[a]n owner may not be held liable under [the Act] for a claim for mental suffering or anguish.” Id. § 57-22-6(6). This is a common claim by renters. Eliminating it streamlines litigation.

The Act allows an owner to respond to a renter’s lawsuit by filing a counterclaim if the suing renter has violated a requirement of the rental agreement. Id. § 57-22-6(5)(d). If the owner has grounds to evict the renter, then the owner should also file a counterclaim for unlawful detainer. SeeKoerber v. Mismash, 2015 UT App 237, ¶ 4, 359 P.3d 701 (noting the district court’s consolidation of an owner’s unlawful detainer complaint as a counterclaim in a suit brought by renter under the Act).

A key provision of the Act is that “[a] renter is not entitled to a renter remedy if the renter is not in compliance with all requirements under Section 57-22-5.” Utah Code Ann. § 57-22-6(4)(b) (emphasis added). As discussed above, Section 57-22-5 identifies a renter’s duties under the Act, which includes being current on the rent and in compliance with the rental agreement. Thus, for example, if a renter attempts to use an owner’s lack of zeal or failure to fix a deficient condition as an affirmative defense or a counterclaim in an eviction action, but the renter is behind in rent, the Act will not help the renter. See id. §§ 57-22-5(g)-(h), -6(4)(b).

However, I tell my clients not to completely rely on this provision and to follow the Act as much as reasonably possible, even when the renter has not fully complied with the notice requirements or may be partially at fault for a deficient or dangerous condition. For example, when a renter hasn’t stated a corrective period or elected a remedy, the owner should still attempt to fix the deficient condition. The owner must decide which corrective period applies and act accordingly. I advise this out of an abundance of caution because a judge may decide that a renter has complied or even substantially complied with the Act. It also gives a judge less of a reason to grant a renter some sort of equitable relief if the renter does not comply with the Act.

Conclusion

In sum, the Act provides a procedure for resolving certain disputes between owners and renters, especially when there isn’t a well-written rental agreement or any rental agreement to define the owner’s and renter’s respective duties. Every owner of residential property, and his or her attorney, should be familiar with the Utah Fit Premises Act.